TRENTON –Senate President Steve Sweeney (D-Gloucester) today announced he would introduce legislation to recapture a share of the massive Republican federal corporate tax cut that is being financed on the backs of taxpayers in New Jersey and other high-tax states.

“The Republican plan provided a huge tax cut for corporations, slashing the federal corporate tax rate from 35 percent to 21 percent, while sharply limiting the federal income tax deduction for state and local taxes on which millions of New Jerseyans depended,” said Senator Sweeney. “My bill would recapture a portion of that corporate windfall to fund programs that will make New Jersey a better place to live and work.”

The Sweeney plan would impose a 3% surcharge on the Corporation Business Tax on New Jersey income earned by corporations making over $1 million in net income. Based on the most recent statistics, about 2,375 companies earning over $1 million are expected to pay about $1.97 billion of New Jersey’s projected $2.375 billion in Corporate Business Tax revenue this year.

With passage of the federal tax law, corporations will be receiving a federal tax cut of over $2.9 billion on profits made in New Jersey. The Sweeney bill would recapture an estimated $657  million of that $2.9 billion federal tax cut to use on programs to boost New Jersey’s economic growth. The 42,000 corporations that earn less than $1 million in net income would be unaffected, as would S Corporations and business partnerships owned by 260,000 New Jersey individuals and families.

“Unlike any tax increase on New Jersey families and individuals whose SALT deduction is capped at $10,000, the federal tax law gave corporations the right to continue to deduct all state and local taxes, so businesses earning over $1 million will be able to write off the 3% surcharge as a business expense,” Senator Sweeney noted. “We have to be smart about tax policy because the new federal tax law changed all the rules.”